Topic: How To Invest

Hi Pat: Could you please give me your recommendation on Labrador Iron Ore Royalty? It seems like iron ore prices are rising. Thanks.

Article Excerpt

Labrador Iron Ore Royalty Corp., $59.65, symbol LIF.UN on Toronto (Units outstanding: 32.0 million; Market cap: $1.9 billion), is the new name for Labrador Iron Ore Royalty Income Fund. The company holds a 7% gross overriding royalty (or 7% of the selling price for each iron-ore product produced, sold and shipped) and a 15.1% equity interest in Iron Ore Company of Canada (IOC). On top of that, Labrador Iron Ore gets a $0.10-per-ton commission on all iron-ore products IOC makes, sells and ships. IOC, which has produced iron-ore concentrate and pellets since 1954, is Canada’s largest iron-ore producer, and is among the world’s top-five makers of iron-ore pellets. Rio Tinto (symbol RTP on New York) is IOC’s operator and majority shareholder, with 58.7% of its shares. Mitsubishi Corp. of Japan holds the remaining 26.2%. IOC operates a mine, a concentrator (a machine that separates ore from waste rock) and a pellet plant at Labrador City, Newfoundland. The company also has…